New Delhi: The Lok Sabha on Friday passed the Pan Masala Cess Bill, aimed at funding both public health initiatives and national security projects, including the Mission Sudarshan Chakra, India’s ballistic missile defence shield.

Union Finance Minister Nirmala Sitharaman said the cess addresses a tax shortfall that will arise after the phasing out of the Goods and Services Tax (GST) compensation cess. “Part of this will be spent on public health, and the other part will go for defence-related purposes,” she told the House. The cess will be levied based on production capacity, starting at ₹101 per month per machine for a standard production rate, and scaling with output.

Sitharaman stressed the importance of modernising defence infrastructure, citing the capital-intensive nature of precision weapons, space assets, and cyber operations. She highlighted Prime Minister Narendra Modi’s initiative, Mission Sudarshan Chakra, as a key priority for protecting critical installations.

The bill received broad support and was passed by voice vote after debates on Thursday and Friday. Opposition parties expressed concerns over the imposition of the cess, citing potential impact on small-scale producers and affordability for consumers.